A new study by Hitachi Capital Business Finance has indicated an alarming deterioration in optimism in the UK's small business sector, particularly retail, where close to a fifth of those surveyed believe they will 'struggle to survive' the next three months.
Some 17% of retailers surveyed in Q3 said they would struggle to survive, which was up from 12% that answered likewise in Q2.
This was the highest level pessimism recorded by the survey, however other sectors also indicated their wariness as to future business prospects.
In Q3, 16% of Hospitality and Leisure businesses believed they would 'struggle to survive', up from 6% in Q2, while there were also high figures for the Medical sector (15%, up from 2%), Education (15%, up from 3%), Construction (13%, up from 5%) and Agriculture (10%, same as Q2).
Brexit Impact
“For the last year, our research has shown that the small business community has seen political and economic change as an opportunity," said Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance.
"Many have looked to expand into markets beyond the UK and create jobs in the communities where they do business. Our latest findings, though, suggest the protracted nature of Brexit negotiations may now be taking its toll."
Over the last two years, Hitachi Capital Business Finance has found that the proportion of small business owners fearing collapse has been consistent at around 4% to 5% for seven consecutive quarters. This quarter, however, that figure has doubled.
The data suggests that 'protracted uncertainty and political infighting' around the Brexit process is creating an economic ripple effect that could cause untold damage to the small business sector in the UK, long held up as the 'engine room' of the economy.
Regional Increase
Regionally, the North East and London saw a sharp rise in the percentage of small businesses worried about their survival – with figures doubling in Wales. Overall, nine UK regions saw a rise in the proportion of business owners predicting that their enterprise would struggle to survive in the next three months.
“It’s also clear from our latest research that small businesses are focusing heavily on the financial health of their business – whether this be improving cash flow, getting tougher on late payment or looking for better ways to secure finance," said Wraith-Carter. "The key thing is that they shouldn’t leave it too late."
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
